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The crisis in the country causes instability. Instability will cause adverse effects to the economy in terms of detering investment (foreign direct investment). Instability and riots also damages infarstructure and criples public services as well. The lawlessness also means people can't go to work and the police and judiciary systems are in a crisis, meaning factors of production are under utilzed. Thus the economy will loose out on investment and its production or GDP will fall (the economy will be producing inside its Production Possibility Boundary which means its not using all its resources fully and efficiantly as posssible), not to mention all the social concequences.

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18y ago

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